I broke this down before and got negged, but here I go again just to break down the real numbers:

500k house at 10% down with 3.49% interest for 25 years costs 350k in interest over the life of the mortgage. So that's 850k. Factor in at least one major (10k ie furnace, roof, water in basement) repair every 5 years and that's another 50k and property taxes at 500 a month will cost you another 150k. So now that 500k house over its' lifetime has cost you over a million.

Ah, but wait, I'll sell it and make bank! Okay, so in 5 years I sell it for 600k. Bye bye down payment of 50k. Property taxes and repairs and interest still cost likely over 100k. So that "profit" is gone. Oh, and my real estate agent will take 5% for doing showings and paperwork just because that's the way it's done.

Oh, but I'm making an investment and have equity. Yes! But if the market goes down, it's a depreciating asset and you can get ****ed easily depending on the market. Plus, people think they have massive amounts of equity after 5 years and in reality a bank might give you 50-75k extra.

Buying a house is only good if a) you are in a good market for it, can fix up a craphole yourself and don't mind waiting b) you need to be stable ie have kids that need to go to schools in that area or c)you can rent out rooms, AirBnB etc to have others pay your mortgage. Otherwise it is not a great financial investment.

This was explained to me by a financial advisor friend I have and my mind was blown.

Real estate moguls, give me some links. first time home buyer, how much money am i going to need saved up * outside* of the down payment?
money for shyt like


appliances
contractor work
furniture

etc

If you’re in a 30 year mortgage then you can’t afford that house. Lol at bank telling you what highest mortgage your eligible for and going with that number no questions asked. Lol at having a spare bedroom you use 5 days a year. Lol at the extra dining room you use never. Lol at spending 5k to update your flooring and not even know if that will impact the value of your home that you may or may not see whenever you sell.



Just lol



If you want to own a house your down payment better be at least 15% and the max number of years better be 20 but you’re smarter if it’s 10 or 15. Otherwise you’re just a loser that the bank owns your house, not you.


Mortgagecells rekd once again


Brb new job opportunity in another city? I can move out no strings attached


Brb lose my job? I’m not tied to a 30 yr commitment.

Renters are winners

If you’re disciplined, taking on a longer-term mortgage with lower payments can be a good move. And then you can regularly plug extra money into the mortgage but still have lower payments to fall back on if things aren’t going well at that moment.

And if you’re young, your income will hopefully increase over the years. So even if you can just barely afford a mortgage when you first sign it, chances are you’ll be far more capable in 3, 5, 10+ years.


This chit is so much more complicated than throwing out absolute statements like “if you have a 30yr mortgage than you can’t afford it”. And that’s why banks etc employ mortgage and financial specialists instead of relying on random internet phucks handing out advice

Provided you have some money on the side for emergencies and are generally wise with your money(no millionaire status), then rarely use your own money to plug away at the mortgage.
Rather spend that money on another downpayment, and then down the line sell house #3 to pay off huge chunks off of houses #1&2, and then make that passive income profit. Nothing happens overnight.

Inflation on house value only happens if you're in a good market. At least at a pace that can outdo the 6-8% return you will get from a decent index fund annually.

i live in a 2000 sq foot 1 million house for $600 a month

rent out a room but i literally use the whole house cuz the owners are always at work for 12 hours lmao

last week the dryer broke costed them 1k for a new one, last year they spent 15k on a new roof


property tax
maintenance
mortgage(25 year jail sentence)


ill never buy a house

Rentcells will always be peasants and homeowners will always be lords. You mad you peasants will never have the glory of us lords?

Problem with this is you need to sell and get the fuk outta dodge to actually realize those gains, or it needs to not be your primary residence. Otherwise if you buy a place and sell it after the market skyrockets but then need to buy a new place, you’re buying into the inflated market again anyways and you don’t actually make any gains

Or you can sell and then downgrade, but then you’re downgrading

You know how I know you are broke?

In my 20s and am well ahead of retirement goals, could live several years with absolutely zero income based on my investments.


All my home owning friends are broke as **** though. I actually understand personal finance and am just fine

Your friends probably overextended themselves just to buy a property... which is stupid...

... and are probably living by themselves instead of renting out part of the house for extra income... which is also stupid.

If your buddies are in their 20s they would have been better off buying a house together, living there together, and then flipping it in 5 years or so after they’ve made a few improvements.

So instead of dropping all that on a house I’ll put it into an index fund and rest easy at night. Any of my friends lose their job they are absolutely skull ****ed.

If I was fired tomorrow I’d laugh it off and misc the next day straight

Absolutely. The dream is to own a house and rent it out to your friends who pay your entire mortgage while you live with them.


Fact is most people opt with the biggest house they CAN get not the one they SHOULD get. Also they all pay PMI because their down payment wasn’t big enough. They also have nagging wives that make them drop 30k+ on home improvement projects that while it may add to the house won’t be money they realize soon, if ever.




So instead of dropping all that on a house I’ll put it into an index fund and rest easy at night. Any of my friends lose their job they are absolutely skull ****ed.

If I was fired tomorrow I’d laugh it off and misc the next day straight

In my 20s and am well ahead of retirement goals, could live several years with absolutely zero income based on my investments.


All my home owning friends are broke as **** though. I actually understand personal finance and am just fine

You are using an example where someone chose a lot of wrong turns in buying a house. If someone had a similar train of thought as you purchasing a house, it would be more beneficial than renting. If any of your friends lost their job and was renting; they would still be absolutely skull ****ed.

So why not do this AND keep your index fund investments?

A lot of wrong turns? Try the status quo for the average home owner.


And no as a renter you’re much less ****ed. No long term commitment to an illiquid asset. No being stuck in one market for a job search because of your house. No extra money to dish out when there are issues with electricity or plumbing. Less costs in general per month renting than owning.



Enjoy wasting time every week to mow your lawn mortgagecels lmao